Landlords 'must know' their local market

With the promise of high yields, strong demand for rented accommodation and no sign that the boom in the buy-to-let sector is set to ease off any time soon, many prospective investors will have been weighing up the possibility of getting in on the lettings game.

Yet while there are impressive returns to be had and plenty of opportunities for aspiring landlords to grab a slice of the action, it's still vital that they take time to do their research in order to ensure they make calculated decisions in terms of their investments.

That's the opinion of David Lawrenson, private rented sector expert at LettingFocus.com, who says that landlords need to know their local market if they are going to set appropriate rent prices and make sensible choices with their portfolio.

"Look very specifically at different types of houses, the different yields and the different areas too," he said.

"You need to really understand your local market and look for things that will drive up rents and house prices. Look at where there is new transport infrastructure, regeneration and jobs coming and buy good quality housing stock."

Indeed, through buying properties in areas that are likely to appeal to prospective tenants and ensuring they are in a good condition, landlords are able to give themselves a strong chance of building a profitable investment.

So given the pitfalls of failing to do the necessary research and jumping into the market blindfolded, investors will be in a far stronger position if they take a considered approach that enables them to react to the conditions of the private rented sector.

And as well as treating a portfolio as a business venture, it is also important to guard against any unexpected costs associated with letting property, so landlord insurance policies are a great asset for both existing and first-time landlords.